Financial statements analysis VNM

General introduction: Vietnam Dairy Products Joint Stock Company English name is Vietnam Dairy Products Joint Stock Company; other name: Vinamilk; stock code HOSE: VNM, is a company man

VINAMILK'S FINANCIAL

STATEMENTS FROM THE THIRD OF 2020 TO THE THIRD

OF 2021

Members:

Nguyễn Phạm Minh Nhật

Lê Tăng Tài Nguyễn Hạnh Nhi Nguyễn Thị Thanh Thảo

CHAPTER I: GENERAL INTRODUCTION ABOUT VINAMILK

1.1 General introduction:

Vietnam Dairy Products Joint Stock Company (English name is Vietnam Dairy Products Joint Stock Company); other name: Vinamilk; stock code HOSE: VNM, is a company manufacturing and trading milk and dairy products as well as related machinery and equipment in Vietnam According to statistics of the United Nations Development Program, this is the 15th largest company in Vietnam in 2007 Vinamilk is currently the leading enterprise of the dairy processing industry, accounting for more than 54.5% of the dairy market share water, 40.6% market share in powdered milk, 33.9% market share in drinking yogurt, 84.5% market share in edible yogurt and 79.7% market share in condensed milk nationwide In addition to strong domestic distribution with

a network of more than 220,000 sales points covering 63 provinces and cities, Vinamilk products are also exported to 43 countries around the world such as the US, France, Canada, Poland, Germany, and Japan After more than 40 years of launching to consumers, Vinamilk has built 14 production factories, 2 logistics factories, 3 branches of sales offices, and one factory milk in Cambodia (Angkormilk) and a representative office in Thailand In 2018, Vinamilk was one of the top 200 companies with revenue over 1 billion dollars in Asia Pacific (Best over a billion)

1.2 Vinamilk's mission:

“Vinamilk is committed to providing the community with top quality and high-quality nutrition

with its own respect, love and high responsibility for human life and society.”

1.3 Core values

Become the leading symbol of belief in Vietnam about nutrition and health products serving

human life

CHAPTER 2: SITUATION OF ANALYSIS OF FINANCIAL STATEMENTS OF VIETNAM INDUSTRIAL TRADE JOINT STOCK COMPANY

Data source for analyzing financial statements of dairy company Vinamilk Vietnam:

- Consolidated financial statements for each quarter of 2020

- Consolidated financial statements for each quarter of 2021

- Stockbiz-FinancialStatements

2.1 Analysis of balance sheet.

2.2.1 Analysis of asset movements

The balance sheet generally reflects the total value of the assets that the company owns and the source of those assets at a given time Therefore, balance sheet analysis helps us get an overview of the company's financial position

2.2.1.1 Horizontal analysis

Table 2.1: Change in total assets in the period from the third quarter of 2020 to the third quarter of 2021

(trích FinancialStatments việt nam )

2.2.1.2 Vertical analysis

Figure 2.1: Change in total assets in the period from the third quarter of 2020 to the third quarter of 2021

Unit:1.000.000 VNĐ

According to the data in figure 2.1-"Changes in total assets in the period from the third quarter of

2020 to the third quarter of 2021", it is easy to see that in the fourth quarter of 2020, not only Vinamilk others companies have dropped too due to the Covid 19 pandemic, but with Vinamilk, this is not happened too bad Right away in the next quarter - the first quarter of 2021, Vinamilk gradually regains its total assets as well as other amounts and by the third quarter of 2021, there is

a slight sign of decrease Overall, Vinamilk’s total assets is not drop down any percentage, instead, it’s number rise up lightly at the quarter of 2021, meanwhile the Fixed assets and long-term investments was the only one dropped

At the initial period, the total assets was not got at 51 million but after 5 periods of years, now it’s number is over 52 million a little, and all the 3 lines have the rise up trend but Fixed assets and long-term investments line is fell down from approximate 19 million to not exact 17 million The good sign here is that Vinamilk is one of the good companies can fight with the Covid 19 pandemic

in Viet Nam

2.2 Analysis according to the fluctuation of capital

Volatility analysis and configurable capital are evaluated as configurable capital pricing in terms of

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

Current assets and short-term investments Fixed assets and long-term investments Total assets

employee size, structure, and impact Analysis of the volatility situation and the structure of sources of information to provide information to joint stock company managers and other managers about the ability

to raise capital, the degree of independence and financial autonomy, see the contribution of each source of capital and responsibilities as well as management requirements of the joint stock company for each capital source The underlying server analyzes the funds based on the balance sheet only The hoist is just a target capital source on the balance sheet that can be shown in the form of regulatory and weighted models

2.2.2.1 Horizontal analysis

Table 2.2: Fluctuation of capital in the period from the third quarter of 2020 to the third quarter of 2021

Unit: 1.000.000 VNĐ

2.2.2.2 Vertical analysis

Figure 2.2: Fluctuation of capital in the period from the third quarter of 2020 to the third quarter of 2021

Unit: 1.000.000 VNĐ

According to the data in figure 2.2-" Fluctuation of capital in the period from the third quarter of

2020 to the third quarter of 2021", Vinamilk did not meet lot of trouble with the Covid 19 pandemic, althought in the quarter of 2020 all the numbers dropped but it was slightly and then in the first period of 2021, Vinamilk has overcome the trouble to achive the better rate in all three lines about The company’s number of total funding has rise up better than ever even higher than the time before the Covid ( from about 50.396.458 VNĐ to 52.067.759 VNĐ ) All the data prove that Vinamilk had do the best in the ability to due with the Covid 19

0

20000000

40000000

60000000

80000000

100000000

120000000

Liabilities must pay Equity sources Total funding

Figure 2.3: Long term restrictions in the period from the third quarter of 2020 to the third quarter of 2021

Unit: 1.000.000 VNĐ

Theorem:

Long-term liabilities is a composite indicator that reflects the total value of long-term debts of an enterprise, including debts with remaining payment terms of 12 months or more or over a production and business cycle normally at the time of reporting

According to the latest Euromonitor data the per capita milk consumption in Vietnam reached 21.8

kg, 18% lower than the average 26.7 kg of certain neighboring countries in Asia The income gap between Vietnam and the compared countries is the main cause of the disparity in milk consumption Therefore, forecasts that Vietnam's economy will reach a growth rate of 6.5-7.5%/year by 2030 (World Bank) , along with the increasing awareness of consumers about the importance of beneficial foods for health, will be a key foundation for the dairy industry to continue its growth in the medium and long term

0

200000

400000

600000

800000

Long term restrictions

2.3 Analyze business performance

2.3.1 Horizontal analysis

2.3.1.1 Profit from business activities after tax

Table 2.3: All profits after taxes

Recently, Vinamilk announced its financial statements for the fourth quarter and the whole 2020

In the fourth quarter of 2020, Vinamilk's consolidated net revenue reached VND 14,425 billion,

up 1.3% over the same period in 2019

Specifically, domestic business recorded a net revenue of 12,122 billion dong thanks to the merger

of GTNFoods Joint Stock Company (GTN) Foreign business recorded a net revenue of 2,303 billion dong, of which direct exports contributed 1,534 billion dong and foreign branches contributed 769 billion dong

In the whole year of 2020, the total consolidated revenue reached VND 59,723 billion, up 5.9% over the same period in 2019 and completing 100% of the year plan Consolidated net sales reached VND 59,636 billion (domestic sales reached VND 50,842 billion, foreign net sales reached VND 8,794 billion)

Consolidated selling and administrative expenses in the fourth quarter of 2020 were VND 4,512 billion, equivalent to 31.3% of net revenue compared to 29.4% of the fourth quarter of 2019 This ratio increased because Vinamilk increased sales activities at the end of the quarter to offset the impact of floods in the Central region at the beginning of the quarter

Consolidated profit after tax (EAT) in the fourth quarter of 2020 reached VND 2,236 billion, up 2.8% over the same period in 2019 Consolidated profit after tax margin reached 15.5%, up 22 bp compared to the same period in 2019

Accordingly, for the whole year of 2020, the consolidated gross profit margin reached 46.4%, down 78 pts compared to the same period in 2019 Consolidated EAT reached VND 11,236 billion and completed 105% of the year plan Net profit margin reached 18.8%, a slight increase compared

to the same period in 2019 The contribution to the State budget of Vinamilk and its member

companies reached more than VND 5,200 billion, up 10% compared to 2019

In 2020, Vinamilk has launched and re-launched more than 15 products to meet the needs of nutritional supplements and strengthen the resistance of consumers Notably, Vinamilk has launched many products in the high-end segment such as pasteurized fresh milk containing Bird's Nest, Grow Plus baby milk powder containing Bird's Nest, Love Yogurt product line, and premium fruit juices Love Fruit…

The net cash balance as of December 31, 2020 was VND 12,142 billion, equivalent to a quarter of total assets and an increase of 23.6% compared to the beginning of the year

2.3.1.2 Net profit from operating activities

In the fourth quarter of 2020, Vinamilk continuously received ratings and reviews on brand and business performance from domestic and foreign organizations, typically: Vinamilk is the only and first company of Vinamilk Vietnam was honored as "ASEAN Valuable Investment Asset"; Vinamilk is the leading unit in the top 10 sustainable enterprises in Vietnam in the manufacturing sector in 2020 and for the third year in a row maintains the No 1 position in the list of "100 best places to work in Vietnam"

Vinamilk has had a bumper season, Vinamilk has announced the report Net profit from business activities since 2020

Net profit from business activities from 2020 is 13539 z and in 2019 is 12,797, Vinamilk's net profit in 2020 increased by 5.8% over the same period in 2019

Specifically, Net profit for each item:

Main operating income:

The global crisis of COVID-19 has entered its second year with a series of problems related to production, supply chain creating barriers for the export sector However, on the other hand, the challenges posed by COVID-19 are a test for businesses in terms of "health," "durability" and the ability to cope in the most critical times

As the face of the dairy industry, Vinamilk's COVID-19 export results are a clear proof of its business bravery and reputation in the international market

Vinamilk's main operating revenue in 2020 is 1581 z, much larger than its operating revenue in the same period in 2019 is 807 z Thus, the growth potential of Vinamilk's main operating income

is likely to increase to 95.8% This ratio increased because Vinamilk increased sales activities in

the final stage to offset the ravages of the Covid-19 epidemic

Financial expenses

The financial cost of Vinamilk in 2020 is 308.5 z, much larger than the same period in 2019 of 186.9 z The growth potential of Financial expenses in 2020 increased to 65% over the same period

in 2019 Of which, interest expense in 2020 was 143.8 z, the rate increased to about 32.1% over the same period in 2019 (108.8 z)

Profit (loss) divided from associate company

From 2020 the business with affiliates of Vinamilk is becoming a loss compared to the market in

2019 The business hook of 2019 is 5.7 z, while the associated market in 2020 is 3.8 z z Thus, business with affiliated companies is making a heavy loss, down 32%

Selling expenses

During nearly 2 years of challenges due to the COVID-19 epidemic, Vinamilk not only accompanied and shared difficulties but also supported us in the transition to e-commerce As a result, the current business situation is developing very positively In 2021, we also imported many new products from Vinamilk and were well received by consumers," said Mr Ivan Tan, business partner in Singapore

It can be said that, from the starting point that Vietnam is a dairy importer, so far, Vinamilk is not only leading in the domestic market, but also bringing its products to 56 countries and territories, with a total turnover of accumulated exports of more than 2.5 billion USD and increasingly affirmed the brand and prestige of Vietnamese milk in the international market./

Costs play a very important role in the business process of an enterprise, so detailed aggregate information must always be collected, checked and monitored Total fee management requirements must be tight so that costs can be minimized in order to gain more profits The good management of the total fee will have sufficient information to help the superiors' management be convenient and be able to make timely and necessary decisions

Therefore, Vinamilk has focused on sales, as seen, Selling expenses in 2020 increased rapidly (13.4 z) far beyond the enterprise's expectation compared to the same period in 2019 of 12, 9 z) Vinamilk's sales increase to 3.4%

Enterprise Cost Management

Increasing competition globally, an increasingly tense regulatory environment and increasing cost pressures show that businesses face more intense challenges than ever before The successful

businesses will be those that have a strong strategic focus to drive operational efficiency and align resources across the business to facilitate strategy execution Business management was born

In order to be able to manage the business in the most effective way, Vinamilk does not hesitate

to spend a large amount of money to be able to manage the business in the most optimal way, bringing high profits to customers with good quality

Vinamlk's administrative expenses increased to 40.2% Business administration expenses in 2020 are 1.9 z, which is much larger than that of 2019 1.3 z Confirming the big vision of Vinamilk enterprise

According to the report, Vinamilk's revenue increased to a record in the third quarter with great support from the strong increase in the domestic market recorded high double-digit growth to compensate for the traditional channel affected by the prolonged distance and strict anti-epidemic regulations from the government when the COVID-19 epidemic broke out With brand reputation, diversified product portfolio and nationwide distribution system, Vinamilk's products have been chosen by many consumers Owning a system of farms and factories across the country has allowed the company to flexibly coordinate production plans, ensuring the supply of goods to consumers nationwide even during a strong outbreak in many locations direction Although the inter-provincial transportation of goods faced obstacles due to epidemic prevention regulations, Vinamilk still maintained the continuity of the supply chain, which is one of the factors that helped the company achieve business results positive business in 2020

2.3.1.3 Operating profit before tax

In the first quarter of 2020, the company's revenue and profit after tax was estimated at 13,241 billion VND and 2,597 billion VND, reaching 21.3% and 23.2% of the year plan, respectively After that, the epidemic began to seep into the economy By the end of 2020, input costs related to key ingredients such as milk powder and sugar have increased significantly and affected the business results of the industry in general and Vinamilk in particular